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Personal Banking > Investments > Investment Advice > Getting Ready to Retire > Assessing your Retirement Resources > Income from CHIP Home Income Plan

Income from CHIP Home Income Plan (also called a Reverse Mortgage)

By the time you retire your home is a substantial asset in your financial portfolio. And it's an asset that can easily be put to work wisely elsewhere in your retirement plans to help you preserve your other investments, help with current cash flow, and may even help you reduce the taxes you pay.

CHIP Home Income Plan is a home equity loan available exclusively to Canadian homeowners to convert a portion of your home equity into tax-free cash. But, unlike a traditional loan or mortgage, you never have to make a payment until you choose to move or sell – although you can make payments if you so choose.

The CHIP Home Income Plan has other advantages over traditional loans or mortgages. For example, there are no income qualifications and once you receive the loan, it can never be recalled.

It's called a Reverse Mortgage because unlike a traditional mortgage in which you make regular payments to a lender, the CHIP Home Income Plan pays you! You do not have to make any payments — principal or interest – for as long as you or your spouse lives in your home.


How it works

  • Homeowners 55 and older may qualify for $20,000 to $500,000 in tax-free money from their home's equity.
  • You may qualify for the loan up to 50% of your home's current appraised value, based on your age and that of your spouse, and on the location and type of home you own.
  • No payment is required while you or your spouse continues living in your home.
  • Home ownership remains in your control.
  • You have the option to pay accumulated interest annually.

Potential tax advantages

  • CHIP Home Income Plan proceeds are received tax-free, like any other loan, and are not added to your taxable income.
  • If the interest on the CHIP Home Income Loan is paid annually, this interest may be deductible if investments were purchased with this loan proceeds. If the interest is not paid annually, then speak to a qualified tax advisor regarding the deductibility of the accrued interest when investments are purchased.
  • Accessing money from your home equity allows you to help preserve your other investments.
  • Proceeds from CHIP Home Income Plan will not affect your eligibility for government benefits.

Financial freedom

  • There are no restrictions on how you choose to use the money from your loan, with one exception. Any outstanding loans secured by your home or other home-related debts, such as another mortgage or a secured line of credit, need to be repaid with the money you receive from the CHIP Home Income Plan. This will also have the benefit of freeing up some of your monthly budget.
  • The extra money can help take the pressure off managing your expenses today, as well as the inevitable increases that will come tomorrow.

Protection of home ownership

  • You have complete freedom to sell your home or move at any time.
  • Homeowners will not be asked to move or sell to repay the loan. Like other mortgages, up-to-date payment of property taxes, fire insurance, condominium/maintenance fees, and maintenance of the property is required.


  • No payment is required while you or your spouse continues living in your home.
  • The full amount only becomes due upon the death of the last surviving spouse, or when your home is sold.
  • You have the option to repay in full at any time. (Prior to 36 months, a pre-payment fee applies. After 36 months, an interest rate differential payment may be applicable.)
  • You have the option to pay accumulated interest annually on the mortgage anniversary date or, if you live in Quebec, on the interest re-set date.

Impact on your estate

  • Upon the death of the last surviving spouse, the loan amount to be repaid is guaranteed not to exceed the fair resale value of your home at the time it is sold, protecting the balance of your estate.
  • After the loan is repaid, your estate retains any remaining proceeds from the sale of the home.

If you'd like to know more about how you might be able to take advantage of the equity in your home, click here to find the RBC financial planning professional (opens new window) closest to you or go to Canadian Home Income Plan (CHIP) (opens external website in new window).


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